The African Growth Story Apex Brasil 25 August 2014

Africa’s economy The continent’s rise is real Source: IMF World Economic Outlook Database, April The size of the African economy has trebled in a decade GDP, current prices (US$b) , , , , , , , , , , , ,870.7 Note: these numbers exclude the recent rebasing of the Nigerian economy. EY’s 2014 Africa attractiveness survey

Continued growth is expected over the next 5 years Five year forecast GDP growth rates (%) indicated on a colour spectrum: Green (higher) to red (lower) Sources: Oxford Economics; EY Growing Beyond Borders In the context of a still weak global economy, Africa’s overall economic prospects remain robust. 5

Investor perceptions A dramatic improvement Respondents citing an improvement in Africa’s attractiveness as a place to do business Attractiveness over the past year Attractiveness over the next three years 60% 73% +4 points Change vs survey +1 point Change vs survey Source: EY’s 2014 Africa attractiveness survey (total respondents: 503). EY’s 2014 Africa attractiveness survey

Actual FDI numbers Strong growth in FDI projects in SSA SSA 19.5% CAGR since 2007 FDI projects in Africa EY’s 2014 Africa attractiveness survey Source: fDi Intelligence.

East, Southern and West Africa FDI growth spreads across Source: fDi Intelligence. EY’s 2014 Africa attractiveness survey Southern Africa CAGR: 14% Share: 33% East Africa CAGR: 23% Share: 17% West Africa CAGR: 28% Share: 17% New FDI hotspots are emerging in Africa CAGR ( ) South Africa Mozambique Kenya Tanzania Uganda Rwanda Ghana NigeriaZambia 17% 33% 31% 40% 23% 20% 6% 51% 19%

With investment increasingly spread across multiple sectors Consumer-facing industries rise in prominence Although investors expect resource-driven sectors to remain the highest potential industries over the next two years, in line with what the actual numbers tell us, infrastructure and consumer- facing sectors are expected to increase in prominence. Source: fDi Intelligence; EY analysis

However, Africa remains a challenging place to do business Source: Kai Krause Kellogg Africa Strategy Framework

Opportunities and risks do vary widely – African markets are diverse and fragmented Note: A composite Risk index is indicated on a colour spectrum from green (relatively more positive) to red (relatively less positive). A fact-based approach to selecting & prioritising markets in Africa is critical. Source: World Bank; Transparency International; WEF Competitiveness Index; EY Growing Beyond Borders Executing a growth strategy in Africa

Choices need to be made & multiple lenses applied Presentation title Coherent regional blocs can be configured in different ways, for e.g.: 1. Southern: Botswana, Namibia, Malawi, Mozambique, Zambia & Zimbabwe. 2. East: Kenya, Tanzania, Uganda, Rwanda, Burundi & Ethiopia 3. Anglophone West: Nigeria & Ghana 4. Francophone West: Cameroon, Cote d’Ivoire & Senegal 5. Central: DRC & Angola 6. Indian Ocean Islands: Mauritius, Reunion, Madagascar & Seychelles

Urban hubs and clusters are the emerging markets of the future Source: fDi Intelligence; EY’s 2014 Africa attractiveness survey (total respondents: 503). Top 15 African states/provinces for FDI projects (Share of total FDI projects) EY’s 2014 Africa attractiveness survey

Respondents who… …believe Africa’s attractiveness has improved over the past year 73% 39% …believe Africa’s attractiveness will improve over the next three years 87% 51% …have a specific strategy for investment in Africa 67% 10% Established Not established Established Not established Established Not established Source: EY’s 2014 Africa attractiveness survey (total respondents: 503). EY’s 2014 Africa attractiveness survey The perception gap remains stark Established vs. not established

”Over this year, we’ll announce US$1 billion investment into Africa. We’re here for the long term. Africa is going to grow. We need to be here and, as a big company, we can afford to take risks around that. We’re accustomed to taking the long-term view from elsewhere in the world — we’ve been in China for 25 years.” Jay Ireland, President and CEO, General Electric Africa “We think that Africa is the next major emerging growth market,” Bruno di Leo, GM for Growth Markets, IBM. Executing a growth strategy in Africa Perspective is important Consciously choose a glass half-full perspective